The IURC order took Vectren to task for not adequately considering various combinations of other less expensive alternatives, especially renewable energy sources, of which it said there was a lack of evidence that Vectren “…made a serious effort to determine the price and availability of renewables.”

In denying Vectren preapproval for the new power plant — which was projected to cost $781 million — the commission cited the potential financial risk to customers who would be stuck paying for it over a 30-year period in a time when the energy industry is rapidly evolving.

According to the 38-page order posted on the IURC website: “The proposed large scale single resource investment for a utility of Vectren South’s size does not present an outcome which reasonably minimizes the potential risk that customers could sometime in the future be saddled with an uneconomic investment or serve to foster utility and customer flexibility in an environment of rapid technological innovation.”

However, the utility commission did give Vectren approval for an estimated $95 million in additional environmental controls and work to one of the generating units at its F.C. Culley power plant in Warrick County.

A press release from Vectren late Wednesday afternoon was succinct in acknowledging the IURC’s rejection of the natural gas plant, noting only: “Vectren’s request to construct a 700-850 MW combined cycle natural gas plant was denied.”

Instead, company’s statement focused on the commission’s approval of the Culley work and it’s final approval last month of Vectren’s 50-megawatt solar farm in Spencer County.

“We appreciate the IURC’s continued thorough review of our electric generation transition plan,” said Lynnae Wilson, CenterPoint’s chief business officer, Indiana electric. “As we demonstrated in our case, economic and reliability factors are driving a transition from coal-based generation and the selection of replacement resources will continue to be our focus. The case was filed at a time of significant changes in generation technology. While a large generation resource offered significant economic efficiencies, the IURC has directed us to increase our focus on the benefits of a more diverse resource mix. We look forward to continuing to discuss with the IURC investment alternatives to provide our customers affordable, reliable and balanced energy.”

Vectren, a CenterPoint Company, sought a certificate of public convenience and necessity from the Indiana Utility Regulatory Commission approving its plans to replace its aging coal-burning A.B. Brown Generating Station.

The state commission is charged with ensuring utilities provide reliable service and fair rates.

The utility wants to retire the Brown generating station, located near the Ohio River in Posey County, southwest of Evansville, as well as most of its Culley plant by the end of 2023.

The natural gas-fueled power plant it proposed would have replaced Brown’s two 245-megawatt generating units and one 90-megawatt unit at Culley with a proposed 850-megawatt natural gas-fueled power plant.

The project drew opposition from environmentalists concerned that its carbon emissions would still contribute to climate change and consumer advocates worried about its cost.

“As a representative of Sierra Club and as a Vectren customer raising my daughter in Southwest Indiana, I am grateful to the IURC for this decision,” said Wendy Bredhold, senior campaign representative with Sierra Club’s Beyond Coal Campaign. “Their proposed gas plant was too big, expensive and risky and would have committed our community to burning fossil fuels for decades to come. Vectren made the right decision to retire its coal plants and now has an opportunity within their 20-year planning process this year to do the right thing and replace coal with clean and affordable wind, solar, energy efficiency and battery storage.”

The IURC order noted Vectren is scheduled to develop a new integrated resource plan (IRP) in 2019. Utilities regulated by the state are required to submit these new long-range plans every three years.

The commission’s order said: “Vectren South should use its scheduled 2019 IRP process to address problems in its modeling, incorporate more options for partnering with other entities and competitive inquiries into smaller-scale options that can be acted upon swiftly to meet the end-of 2023 date upon which additional capacity may be needed.”

The Citizens Action Coalition and other organizations opposed to the plant contended Vectren’s integrated resource plan was based on poor modeling and would have rushed its customers into a large capital investment without properly considering less risky, lower-cost alternatives to the proposed 850-megawatt power plant.

The groups, as well as the state’s Office of Utility Consumer Counselor (which represents ratepayer interests in IURC matters) argued that the proposed gas plant’s power generating capacity exceeded customer demand. Consumer parties also noted the plant would lock consumers into a fossil fuel energy infrastructure for decades to come and not allow flexibility to employ conservation and clean energy alternatives.

More about Vectren, a CenterPoint Company, from C&P:

Court: Vectren can bill customers for $55 million lost revenue from energy efficiency plan

Vectren/CenterPoint merger: Four takeaways

Vectren solar projects are now producing energy

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